Florida inching closer to medical marijuana regulations

Medical marijuana has been a reality in Florida for several years via the “Charlotte’s Web” low-THC path, or, via the path for patients who are terminally ill.  However, as of January 3, 2017, a new path has been created for a much more inclusive class of medical marijuana patients.  The new protocol will not be limited to low-THC or to terminally-ill patients. Rather, it will be available to those with specifically-listed conditions such as cancer, glaucoma, PTSD, HIV, and, a “chronic nonmalignant pain” catch-all condition.  On June 23, 2017, Governor Scott approved Senate Bill 8-A, currently found at Chapter 2017-232 of the Laws of Florida.

While the laws provide a specific framework for the new medical marijuana system, many details are yet to be drafted, which is the current task of the Department of Health’s Office of Medical Marijuana Use.  “But wait, this is an intellectual property blog, why are we writing about this?”  And, “I’ve heard that Florida uses the ‘vertical integration’ model, which limits participants in the industry.”  True.  But, as more patients are added to the medical marijuana registry, more licenses will be added for cultivators and treatment centers (yes, they must be the same entity).  And, we expect that each year there will be adjustments to the regulations and laws as the market takes shape.

So, why is this important from an intellectual property perspective?  For a number of reasons.  For example, as long as marijuana is a Class 1-scheduled substance under the Controlled Substances Act, any cultivation, possession, sale, transport, etc. of cannabis is illegal at the federal level.  It does not matter that Florida is legalizing certain aspects.  Thus, your brand for a medical marijuana product is likely unregistrable via the United States Patent and Trademark Office.  (There are registrations for marijuana-related goods and services, but if the federal application reveals goods or services that in any way might violate the CSA, then the application will likely be rejected.  See my prior blog post HERE.)

Despite the federal obstacles, your brand may be registered under Florida’s state trademark registration system.  For example, there are already state registrations for businesses such as a nursery/dispensing organization and an independent cannabis testing lab.  It therefore appears as if Florida will issue registrations for trademarks which would otherwise not be allowed registration at the federal level.

But, before you start filing your state trademark applications, there are numerous issues you need to discuss with your attorney, such as the requirement that you are actually using the mark in commerce at the time of filing the application.  Florida does not offer an “intent-to-use” application as is available at the federal level. Thus, you cannot “reserve” a brand by filing an intent-to-use application.  More importantly, if you are a licensed dispensing organization or seek to become one, you will be bound by the new law, and the new law contains restrictions on your advertising practices, including requiring Department of Health approval of your trade name!  Here’s an example from Chapter 2017-232:

A medical marijuana treatment center may not engage in advertising that is visible to members of the public from any street, sidewalk, park, or other public place, except:

1. The dispensing location of a medical marijuana treatment center may have a sign that is affixed to the outside or hanging in the window of the premises which identifies the dispensary by the licensee’s business name, a department-approved trade name, or a department-approved logo. A medical marijuana treatment center’s trade name and logo may not contain wording or images commonly associated with marketing targeted toward children or which promote recreational use of marijuana.

2. A medical marijuana treatment center may engage in Internet advertising and marketing under the following conditions:

a. All advertisements must be approved by the department.

b. An advertisement may not have any content that specifically targets individuals under the age of 18, including cartoon characters or similar images.

c. An advertisement may not be an unsolicited pop-up advertisement.

d. Opt-in marketing must include an easy and permanent opt out feature.

Another example comes from the section of the law which states what must be included on the packaging for the medical marijuana product:

The product name, if applicable, and dosage form, including concentration of tetrahydrocannabinol and cannabidiol.  The product name may not contain wording commonly associated with products marketed by or to children.

As you can see, the Department of Health must approve your trade name and logo.  Further, your Internet-based advertising must be approved by the Department of Health.  Oddly, there is a specific ban on “unsolicited pop-up advertisements,” and there is an “opt-out” requirement for marketing (which is likely already a requirement via the federal CAN-SPAM law).  As for the packaging requirement, while the law does not say that the Department must approve brand names, the current guidance is simply that the brand name of the product “may not contain wording commonly associated with products marketed by or to children.”  One wonders what the drafters had in mind when banning names associated with products marketed “by” children.  I understand not using terms associated with products marketed “to” children, but “by” children?  As in, lemonade and Girl Scout Cookies?  Aha!  Girl Scout Cookies happens to be the name of a very popular strain of cannabis, so perhaps that was the reason for including “by” children.  This provision would certainly prohibit selling a “Girl Scout Cookie” strain of cannabis concentrate oil.

Since the Department of Health is only just now writing the relevant regulations, we don’t know what other implications there may be for marijuana-related-business branding, but we do know that branding will be tightly controlled.

Of course, this is just one small issue related to intellectual property and the cannabis industry.  Other issues such as trademark licensing, the federal/state disconnect on trademark registrations, patenting cannabis-related inventions, trade secrets, copyrightable content (and ownership thereof), and many more remain just as important.  Given the high level of risk and high-cost of entry into this market, it is critical to carefully and cautiously plan your participation.  And, while the majority of the States now have some form of legal marijuana use, it is worth repeating (again, and again, and again) that federal law treats the cultivation, possession, and use of marijuana for any purpose – even a medical one – as a crime, regardless of state law.  Accordingly, the importance of due diligence cannot be overstated.

Florida Medical Marijuana CLE in June

I’ll be giving a short presentation on the intellectual property issues relevant to medical marijuana businesses – whether it’s a dispensary, farm, “lifestyle” brand, or any other company with an interest in medical (or legal recreational) marijuana.

The CLE is in Miami on June 29 and 30.

I encourage you to take a look at the agenda for this CLE.  Not only is John Morgan speaking at the event, but some highly-respected and experienced attorneys will also be speaking, such as folks from Harris Bricken LLP.  I’m looking forward to this CLE not only for the chance to speak but also for the chance to hear and learn from these industry veterans.

Here’s a link to the program, and these are the main topics:

  • Amendment 2 Rules Update
  • Federal vs. State Conflict
  • Taxes and the Treatment of Cannabis Income
  • Real Estate and Land Use
  • Intellectual Property
  • Marijuana Banking
  • Investing in the Cannabis Industry
  • Ethical Considerations and Legalized Marijuana
  • Medical Experience in Other States
  • Contracting with Marijuana Related Businesses
  • Insurance in the Cannabis Industry

Best Footnote in a Legal Opinion?

FN6: The court imagines an appropriate reaction from SpongeBob SquarePants would be, “Aw, tartar sauce!” SpongeBob SquarePants, Hall Monitor (Nickelodeon television broadcast Aug. 28, 1999).

That footnote is from a Janury 11, 2017 opinion by Judge Gray H. Miller of the Southern District of Texas which granted partial summary judgment to Viacom in its lawsuit against the operator of a proposed restaurant named the “Krusty Krab,” which we all know is this:

krusty_krab

Source: http://spongebob.wikia.com/wiki/Krusty_Krab

A couple of takeaways:

  1. Notice that I said this was a “proposed” restaurant.  How did Viacom find out about it if it was not in operation yet?  Because the operator of the restaurant filed a trademark application for THE KRUSTY KRAB for use with restaurant services.  Companies routinely monitor the USPTO’s trademark application records (i.e. the Official Gazette) so that they can file oppositions to the applications before they mature into registrations.  Except in this case, Viacom chose not to oppose the application at the USPTO level and instead sued in federal court.  (Based on the trademark application timeline, Viacom may have inadvertently missed the window to oppose the application, and since it’s an intent-to-use application, Viacom would have had to wait until the application matured into a registration to then try and cancel it.  If that’s the case, Viacom could have been waiting for up to three years before the applicant filed a statement of use, which is what would then push the application to a registration.)  Procedure nerds might be wondering how the case was ripe for adjudication if the restaurant was not yet in business.  When there is imminent threat of infringement, a case may be ripe for injunctive relief, and that’s what happened here.
  2. Even fictional brands can be protected under trademark law because consumers will expect a connection between the fictional brand and the source of the movie or TV show that uses the fictional brand.  Such as the Simpsons-themed food and beverage at Universal Studios:

img_0096

Source: http://www.foodbeast.com/news/krusty-burger-and-moes-tavern-now-open-at-universal-studios-hollywood/

See also: Springfield Dining at Universal Orlando

Here is the FULL OPINION.

Meet Little Debbie

In preparing for my presentation on how Florida’s vote on medical marijuana will affect intellectual property issues within Florida, I got the cliche idea to maybe pass out non-medicated brownies at my presentation.  I know.

But, before discounting the idea, I thought about Little Debbie’s “Cosmic Brownies”:

brownies_cosmic-2wc9v5

Then, like a true obsessed trademark attorney, I wondered if Little Debbie had a trademark registration as I would not be surprised if “cosmic brownies” might be a term used to brand medicated brownies.  Sure enough, after learning that the Little Debbie brand is actually owned by McKee Foods Kingman, Inc., I found the registration for COSMIC for use with brownies and other snacks:

http://tsdr.uspto.gov/#caseNumber=76479218&caseType=SERIAL_NO&searchType=statusSearch

That led me to another awesome discovery – Little Debbie is real!  Certain Little Debbie treats are a guilty pleasure of mine.  Oatmeal Cream Pies, Christmas Trees, etc – I’ll eat em.  So, learning that this childhood hero is real, well, it was a good day.

How did I find out she is real?  No, I didn’t simply read the Little Debbie website.  It was this little statement in some of the USPTO records for registrations for “LITTLE DEBBIE”:  “Little Debbie” identifies Debbie McKee-Fowler, a living individual whose consent is of record. The portrait or likeness shown in the mark identifies Debbie McKee-Fowler, a living individual whose consent to register is made of record.”

As I blogged HERE, if a mark identifies a living individual, consent must be granted to use the name or likeness of that individual before a registration will issue.

Here’s how “Little Debbie” looks now:

See also: http://www.huffingtonpost.com/2015/06/16/real-life-little-debbie_n_7597256.html

Pretty cool!

Prince and Chyna – Digital Ashes

Following news of Prince’s death, the USPTO posted the following image on Facebook about Prince’s intellectual property portfolio:

uspto

(Original HERE)

That was an interesting post, and kudos to the USPTO for posting it.  Who knew Prince had a design patent for a keytar?

Sadly, Chyna was not mentioned. She also died within the last 24 hours, and she had some IP. Well, actually, the registered trademarks for CHYNA were owned by the WWF/WWE, her former employer. Even more sad is that they all appear to be “dead” marks, meaning that they were not renewed for some reason:

chyna

When a company no longer uses a brand, it makes sense to stop paying the few-hundred dollars in fees between the 5th and 6th years of registration and every 10 years thereafter. In fact, if a company has no intention of continuing to use a mark, and if they have in fact stopped using it, then it would be improper to renew the registrations.  In this case all of the registrations were initiated around 2001, and they were all abandoned in 2009.  At that point she has already started the next phase of her career – adult film and reality TV.  But there is something morose about seeing the abandoned trademark registrations in the wake of her death when there were rumors that Chyna would wrestle again one day, or at least be inducted into the wrestling hall of fame.

From the graphic above, here are the links to the various registrations:

For “Toy action figures, bendable toys, bean bag bears, bowling balls, pool cues

For “PRERECORDED VIDEOTAPES AND CASSETTES FEATURING SPORTS ENTERTAINMENT

For “CLOTHING, NAMELY, SHIRTS

For “BOOKS IN THE FIELD OF SPORTS ENTERTAINMENT; FOLDERS; FRAMED PICTURES; POSTERS; TRADING CARDS; COMIC BOOKS; CUSTOMIZED PERSONAL CHECKS

For “Entertainment Services, namely, wrestling exhibits and performances by a professional wrestler/entertainer

New take on an old (infringing?) idea

I read about a recently-published patent application from Apple that will allow an audio device (presumably an i-Device) to “self-censor” explicit content.  The application is titled “Management, Replacement and Removal of Explicit Lyrics during Audio Playback,” and you can read the application HERE.

apple-fig1
Figure 1 from the patent application

Here is the abstract from the application:

Unwanted audio, such as explicit language, may be removed during audio playback. An audio player may identify and remove unwanted audio while playing an audio stream. Unwanted audio may be replaced with alternate audio, such as non-explicit lyrics, a “beep”, or silence. Metadata may be used to describe the location of unwanted audio within an audio stream to enable the removal or replacement of the unwanted audio with alternate audio. An audio player may switch between clean and explicit versions of a recording based on the locations described in the metadata. The metadata, as well as both the clean and explicit versions of the audio data, may be part of a single audio file, or the metadata may be separate from the audio data. Additionally, real-time recognition analysis may be used to identify unwanted audio during audio playback.

That description immediately reminded me of an old copyright infringement case that was brought on behalf of Hollywood movie directors who objected to a service called “CleanFlicks.”  CleanFlicks would purchase DVDs of movies, edit out the “objectionable” content, and then sell or rent the “clean” versions.  Ultimately, this practice was considered copyright infringement.  Here’s a brief analysis of the case from the Copyright Office.  From the analysis:

The court held that public distribution of edited versions of plaintiffs’ films for the purpose of eliminating objectionable content did not constitute fair use. It ruled that the edited film versions were not transformative because they added nothing new to the originals. It further held that the “amount and substantiality” factor weighed against a finding of fair use because the movies were copied in their entirety for non-transformative use. Regarding the fourth factor, plaintiffs claimed that there was no adverse effect on the market for the films because they maintained a one-to-one ratio between original and edited films, and that but for their editing, the defendants would not have sold those particular original copies. The court, however, stated that this argument ignored the defendants’ “right to control the content of the copyrighted work,” and further remarked that “[w]hether these films should be edited in a manner that would make them acceptable to more of the public … is a question of what audience the copyright owner wants to reach.” The court also found that editing the versions as a form of comment or criticism was a public policy argument that was not appropriately raised in the copyright context.

But, Apple’s technology might not be making a new copy of a song to then censor, rather, it’s merely bleeping or silencing-out a portion, so there is a decent argument that this will not be a copyright issue.  “Moral rights,” which can protect the integrity of (or cursing in) a work, are generally not recognized in the U.S., so the mere act of censoring a work isn’t necessarily copyright infringement.  But, Apple’s technology is similar to the facts of a 1970’s case wherein ABC was sued by the people behind the Monty Python program based on ABC making edits to Monty Python re-broadcasts.  There, the court found that ABC might actually be violating the Lanham Act, which forms federal trademark and unfair competition law.  By editing the episodes, ABC misrepresented the source of the episodes.  That is, by screwing around with the way that Monty Python’s writers intended the episodes to look, ABC damaged Monty Python because viewers might think that the edited, “less good,” episodes originated with Monty Python.  This is similar to a line of cases where Rolex has successfully sued after-market jewelers who add “bling” to Rolex watches.  Rolex argues that they would never add a dial full of diamonds or other tacky embellishments, and when jewelers do so, they damage the Rolex brand because consumers might think that Rolex was the source of the tackiness.

In sum, Apple may not even bring this technology to market, and even if they do, I would imagine that for artists to have their music on iTunes (the patent anticipates use in streaming environment), they will have to agree to allow the use of the technology.  But at the end of the day, this may not be legally actionable anyway.  Artists typically create a “clean” mix of a song.  I wonder if Tipper Gore would have approved?

Apple’s full application may be downloaded HERE.

(Bonus thoughts:  the idea of piecing a song together from multiple audio streams located at different sources is interesting.  The patent application doesn’t just address adding a “beep” in place of a dirty word.  The “clean” music can be seamlessly spliced into the song on-the-fly.  As we’ve recently seen with Kanye tinkering around with edits and mixes of songs from The Life of Pablo after its release, this technology may have some positive creative merit – i.e. custom MP3/audio files depending on what time of day the audio is streamed or downloaded.)